Comment by Terr_
16 hours ago
> Using rice as currency is not too different from using Joules as currency
There are enough differences that we still need to worry about them: Would you really have no preference between them when there's a famine? Which one would you rather have when someone announces they've just cracked fusion power generation?
Even among such "suitable" commodities (durable, fungible, divisible, etc.) there are differences in risk/utility which don't vanish simply because there's a market for exchanging the two.
Fiat currency is significantly more isolated from such confounding factors, at least as long as people assume the government will continue to exist. It doesn't go crazy
> it's ultimately for the most part powered by people eating.
I am reminded of the subsistence farmer's reasons [0] for not converting everything they have to/from coinage:
> The thing is, as the food supply contracts, the price of food rises and the ability to buy it with money shrinks (often accelerated by food hoarding by the wealthy cities, which are often in a position to back that up with force as the administrative centers of states).
> Consequently, for the [farming] family, money is likely to become useless the moment it is needed most. So while keeping some cash around against an emergency (or simply for market transactions – more on that later) might be a good idea, keeping nearly a year’s worth of expenses to make it through a bad harvest was not practical.
[0] https://acoup.blog/2020/07/24/collections-bread-how-did-they...
> No, there are significant differences: [...] does not make them equivalent as currency.
Did I say rice was exactly equivalent to energy, or did I say that it was not too different? Surely you can see that rice is more analogous to energy than to drill bits.
>So while keeping some cash around against an emergency (or simply for market transactions – more on that later) might be a good idea, keeping nearly a year’s worth of expenses to make it through a bad harvest was not practical.
Hence the point of notes. "Rice is not such a bad thing to base your currency on" doesn't mean wallets should be literal fistfuls of rice grains in bags that you lug around.
I'm not a big fan of how abstract modern monetary systems are, and I'm still trying to decide whether they confuse people by accident or design.
> whether they confuse people by accident or design.
Both, surely
Tangent: there is little reason to believe that fusion will provide cheap power.
Why is it so?
It’s a complicated engineering system with high capex to drive a steam turbine. It’s hard to compete with something like that in a market increasingly driven by intermittent periods of essentially free energy. Too cheap to meter didn’t work out for nuclear either.